MR. McCLELLAN: Good afternoon, everyone. I have one announcement to begin with. The administration, today, is releasing an updated economic forecast that shows the strong economic expansion in the United States is expected to continue, with healthy job creation and contained inflation. The new economic forecast, which will be used for the President's fiscal year 2007 budget, is similar to the consensus of professional, independent economic forecasters and our previous forecasts that we have released.

Early indicators of activity suggest that the growth of real gross domestic product, or GDP, during the four quarters of 2005 will be about 3.5 percent, revised up 0.1 percentage point from the mid-session projection in June of 2005. In 2006, real GDP growth is expected to be similar, at 3.4 percent. This week's estimate for the third quarter of this year, the administration's new economic forecast and the consensus of private forecasters all show strong economic growth going forward. The economy, our workers and businesses have overcome many challenges, including the hurricanes that hit the Gulf Coast region and high energy prices. We will be holding a conference call with a member of our Council of Economic Advisers, Matt Slaughter, at 2:00 p.m. today to discuss this forecast. And we'll be releasing that information to you all, as well.

And with that, I'm glad to go to your questions.

Q Does it have any numbers on unemployment figures or gas prices predicted for next year?

MR. McCLELLAN: I think this is the economic forecast and GDP numbers, and we'll be putting out that information. And I'll let Matt brief you all further about the statistics and forecast that we're putting out.

Q What about a deficit forecast?

Q Could I go to another subject?

MR. McCLELLAN: Yes, you may.

Q Yesterday the President wasn't very specific about when some troops might be able to come home. You were saying earlier in the week possibly next year. Is that still a fact?

MR. McCLELLAN: I think the President was very specific in the way he outlined our clear plan for victory in Iraq. And that's what the American people want. Our troops are doing a great job completing the mission. And what the President said was, is that we should not have artificial timetables. That sends the wrong message to our troops, it sends the wrong message to the enemy.

We need to base our decisions on troop levels on the recommendations of our commanders on the ground who are in the best position to make those decisions, not based on artificial timetables set by politicians here in Washington, D.C. I think if history has taught us anything, it is that we need to look to our commanders who are on the ground to make these decisions, and they make those decisions based on conditions. And so it's a conditions-based withdrawal that we are talking about, and it will be based on achieving victory in Iraq. And that's what the American people want.

Q But possibly next year?

MR. McCLELLAN: I'm sorry?

Q Possibly --

MR. McCLELLAN: Well, what we've said, and what the President indicated, is that heading into the elections, we increased the number of troops in anticipation that some of the enemies of freedom in Iraq, like the terrorists and regime loyalists, might try to carry out attacks leading up to the elections. The elections are taking place in two weeks for a permanent representative government. The Iraqi people have met each milestone for the political process, and it's important to have benchmarks in place.

And we do. The benchmarks are in place for the political process; benchmarks are in place for the training and equipping of Iraqi security forces. We have a three-track plan. It's based on the security front, the economic front, and the political front. And we're making progress on each. As the President indicated yesterday, there are many challenges that remain. There are going to be tough days ahead. But what we're working to achieve there is critical to prevailing in the war on terrorism and critical to laying the foundation of peace for generations to come.

Q Scott? Yesterday, the President, for the first time, went into a greater level of detail about a key aspect of the plan, the training of Iraqi --

MR. McCLELLAN: I thought you said he wasn't very specific. Now you're saying -- (laughter.)

Q Can I just stick with my question? (Laughter.) He went into a greater deal of specificity regarding the training of Iraqi troops, and acknowledged that not everything had gone well. What was his purpose in acknowledging to the American people that not everything had gone well?

MR. McCLELLAN: Well, in a time of war there are always going to be difficulties. And what's important in a time of war is that you're able to adapt and adjust to circumstances on the ground. We have a dynamic strategy in place, one where our tactics are flexible and able to adapt to the conditions on the ground, and adapt to the enemy. General Casey has talked about that. The President quoted General Casey yesterday and talked about the importance of being able to adapt to those conditions on the ground. And what the President talked about yesterday in terms of the training and equipping of Iraqi security forces was that we have learned from experience and we've worked to improve the training as we have moved forward.

The important thing to look at is that the Iraqi security forces are controlling more and more territory, and they are more and more engaging in the fight and taking the lead in the fight. The President talked about the some 90 square miles in the Baghdad province that the Iraqi security forces are now in control of, and the areas that they're in control of in different parts of Iraq. And that's an important barometer to look at when you're measuring progress.

MR. McCLELLAN: Well, we've seen the reports. We first learned about it when we saw the reports yesterday, I think in the Los Angeles Times was the first place that that was reported. We are very concerned about the reports. We have asked the Department of Defense for more information. General Pace has asked people to look into the matter and get the facts, and so we want to see what those facts are.

Q Well, the military has admitted that they've been doing it. Does the White House find that acceptable, unacceptable?

MR. McCLELLAN: Well, what the Pentagon has said is that they don't have all the facts; they want to gather the facts and then talk about it further. We want to know what those facts are, too. We are very concerned about the reports that we have seen.

Q So this is a bit of a hypothetical, but should it be determined that, in fact, they have been doing this, would the President find that acceptable --

MR. McCLELLAN: I'm not going to engage in a hypothetical. Let's find out what those facts are.

Q Well, then what is the basis of your concern?

MR. McCLELLAN: The reports that we've seen -- the media reports.

Q But if you're concerned, that suggests that you would not approve of this.

MR. McCLELLAN: That's why we asked the Department of Defense to look into this. And we're seeking more information. I know that the Pentagon is seeking more information, as well. General Pace said he didn't know what the facts were -- he was asked about it just last night on a news program, and he said that he had just learned about it, as well.

Q At a time when the President talks about trying to build institutions, free institutions in Iraq, does even the level of reporting on this so far undercut that message?

MR. McCLELLAN: Well, the United States is a leader when it comes to promoting and advocating a free and independent media around the world, and we will continue to do so. We've made our views very clear when it comes to freedom of press. And in terms of this specific issue, again, what we want to do is find out what the facts are, and then we'll be able to talk about it more at that point. But we are very concerned about the reports.

Q But this administration also has a history of having some questions made about paying columnists and having packaged news made available.

MR. McCLELLAN: I think the President made very clear what his views were on those issues, and some of the practices that had occurred were stopped, and steps were taken to prevent that from happening again.

Q Well, would his views be similar on this particular issue?

MR. McCLELLAN: I've expressed our views on this issue at this point.

Go ahead.

Q Who's watching the store, really? How can we spend millions of dollars to plant positive stories in Iraq and nobody around here knows --

MR. McCLELLAN: Again, this is --

Q -- anything about it? How is that possible?

MR. McCLELLAN: This is based off some media reports. We want to find out what those facts are.

Q How did they get their hands on the money to begin with?

MR. McCLELLAN: You might want to direct your questions to the Department of Defense to find out more information, Helen, because they're looking into it.

Q But it isn't a separate world. It's your world.

MR. McCLELLAN: That's why we're trying to find out the facts.

Go ahead, Martha.

Q Scott, certainly there are some rules that the military could involve themselves in with information operations. What could the military do?

Q But what would you find acceptable in terms of information operations?

MR. McCLELLAN: Well, again, I think the military can talk to that. That would be a good question to direct back to the Pentagon.

Q And can we just go back to what your concern is here again? I know you don't want to go into hypotheticals, but you are concerned, obviously, if the military is paying for stories to be published over there.

MR. McCLELLAN: That's what the news -- the news reports are suggesting.

Q That's absolutely what --

MR. McCLELLAN: Yes.

Q Can you expand on that a bit?

MR. McCLELLAN: Well, I'd rather let us get the facts and then be able -- and then talk about it more -- and then talk more about it afterwards.

Q Are you concerned that General Pace didn't seem to know about it?

MR. McCLELLAN: Well, again, we need to see what those facts are. And General Pace indicated that he learned about it from the media, and that's the way we learned about it, as well.

Q Can I go to Iraqi forces?

MR. McCLELLAN: Sure.

Q Back on Iraqi forces, you talk about that you have a certain number that you want trained and equipped and you know when that will happen. The President talked yesterday about the training of Iraqi forces and the basic training they undergo with Iraqi forces being the same or similar to U.S. forces. Is there a formula for when you have a certain number of Iraqi troops trained and equipped that you could lose the equivalent number of U.S. forces?

MR. McCLELLAN: Well, I think -- and in fact, this goes back to Steve's question, and maybe I didn't hit on it as directly as I should have, but one thing that I said earlier in the week was, and I think it's spelled out in our strategy, is that the expectation is that conditions are going to be changing on the ground in the coming year because we're making real progress when it comes to moving ahead on the political front, supporting the Iraqi people as they move forward on the political front, and making real progress on the security front, meaning the training and equipping of Iraqi security forces. But the decisions -- and that we'll be able to change our posture, as well -- but those decisions will be guided by what the commanders on the ground recommend. And they make those recommendations based on the conditions on the ground. And so they will look at all those issues, and then make the decisions.

Now, we fully expect, as the Pentagon had indicated, that we're going to be able to reduce some of the troop levels that we increased heading into the elections after the elections take place, and then from there, I mean, I think some have talked about how next year could be a period of significant transition. And I think that based on the real progress that we're making, is that's true. But it has to be looked at in terms of what the conditions on the ground are. And we're going to make sure -- if the commanders say we need more troops, we'll send more troops in; if they say we can reduce these troops, then we'll reduce those troops.

Q But you can't look at it in a way, in saying, okay, we have this one independent battalion, so we can pull away a battalion, we have this --

MR. McCLELLAN: Well, I think you have to look at the battalions. As the President indicated yesterday, there are some 40 battalions now that are taking the lead in the fight. So there's real progress being made. There are now some 120 battalions when it comes to the Iraqi army and the Iraqi police forces that have been trained and equipped. That is significantly up from just over a year ago. So real progress is being made there. And he talked about the high standard that one has to meet to be completely independent. And there are even some NATO countries that have battalions that don't meet that standard. The President talked about that in his remarks.

Now, I'm sorry, go back to the first part of your question.

Q The first part was about a formula, whether there's a formula, but --

MR. McCLELLAN: Well, that's why I said -- I said earlier in response to Steve's question. We do have benchmarks when it comes to training and equipping of Iraqi security forces. And I talked about some of the progress, some of the numbers there. The President talked about some of those numbers, as well. Some of that information, obviously, is classified for important reasons. But we will make decisions based on what the commanders say.

Q Scott, yesterday, Democrats were critical of the President's speech. Not only, they claimed, for not giving enough specifics on how he would reach the goals that he articulated, but also criticized him for again using members of the military or cadets who will be members of the military as a backdrop for a political speech. What does the President say to that criticism?

MR. McCLELLAN: What I said yesterday, first of all. But let me go back to the first part of your question, because those congressional leaders, those Democratic congressional leaders who try to suggest that we don't have a plan are deeply irresponsible. They have been briefed by our commanders about their plan for succeeding in Iraq. And so I think that's just deeply irresponsible, first of all.

And second of all, when it comes to talking to our troops, the President was talking to the midshipmen at the Naval Academy yesterday. The President talks about the war on terrorism in many different formats, but he is the Commander-in-Chief, we are a nation at war, and no one has more invested in this war than our men and women in uniform.

MR. McCLELLAN: No. Good question, and I can update you on that. At this point, we've never received a jury summons from the court. We checked, but when we learned about it, I think through media reports, we did reach out to the court to find out about this jury summons. And apparently, this summons was for Monday, December 5th. We have since called the court to inform them that the President has other commitments on Monday -- (laughter) -- and that he would like to reschedule his jury duty. And so we'll be working with the court to reschedule his jury duty. The judge, in fact, was the one who we reached out to and contacted, and he indicated that that would be fine and that he would work with us to reschedule. (Laughter.)

Q When are you rescheduling it for?

Q He can get his federal appointments --

Q Where will the --

MR. McCLELLAN: But, let me -- one serious note, one serious note, jury duty is an important civic responsibility, and it's important that people do serve.

Q Would he like to serve in the Cindy Sheehan case down there? (Laughter.)

Q All right, Scott, back on Iraq and the war and funding for the war, how much of a priority is it of this administration to shore up the pipelines, the oil pipelines that they are being blown up by many of the insurgents? Senator Kerry was standing outside not long ago saying, basically, that there's not enough security for these pipelines. So what is the priority? And you think this administration said --

MR. McCLELLAN: Well, the oil and the revenues from the oil is controlled by Iraqi authorities. There's a ministry that oversees that.

In terms of providing security, we are working with Iraqi security forces and helping put them in position to where they can guard some of that critical infrastructure. But that is something that the terrorists do try to target in Iraq to try to derail the transition to democracy. And that's why it has been a priority to make sure that steps are being taken to address those issues.

Q -- say that part of the proceeds from the oil revenues could go to funding the war?

MR. McCLELLAN: No, the money that is received from oil revenues is money for the Iraqi people, and it goes to Iraqi authorities. Now, the government, obviously, will be using some of those resources to address some of their important needs. But that's their money.

Q So would there be any kind of way that they would give it back to us to help -- to pay the United States for security, I guess?

MR. McCLELLAN: I think we've made it clear that the oil revenues are Iraqi resources, and it's for the Iraqi people. And it's controlled by the Iraqi government. But it -- as those revenues come in, it does help address important needs. And now we've provided some reconstruction money to help address some of the needs in the aftermath of going into Iraq. And we're continuing to move forward on the reconstruction. That's an important part of the economic side. And the President spelled out, yesterday in our strategy document that we released for the American people, the progress that's being made there and the challenges that remain when it comes to moving forward on the economic side.

Q And on World AIDS Day, the White House is touting the fact that globally, that they're succeeding in the effort, but at the same time, Africa is a major component. But you have one component in Africa, particularly South Africa, where the leaders are not looking at AIDS approach that the White House, the ABCs, as something that's really viable. What is the White House doing to change that mind set of that leader as the President has had meetings with that leader recently within this year?

MR. McCLELLAN: A couple of things. First of all, under this President, we have made an unprecedented commitment to combating HIV/AIDS. And we are moving forward on the President's emergency relief plan to make sure that money is being provided to highly afflicted countries in different parts -- in Africa, in the Caribbean, and even some countries in Asia. And we are following through on the commitment that we made. This is the largest health initiative of any nation directed to a single disease. And the President is strongly committed to combating the scourge of AIDS, not only abroad, but here at home, too. We're doing a lot at home, and the President talked about it in his remarks.

In terms of President Mbeki and South Africa, the President has met with President Mbeki on a number of occasions. Most recently, he met with President Mbeki here at the White House back in June of this year. And I think that they also met at Gleneagles in July of 2005, as well. And we work very closely with the South African government on these issues. Mrs. Bush has visited there, as well. And I think the South African government, like the United States, understands the importance of combating this pandemic.

Q But there are fundamental disagreements on how to combat it. They're looking at it through a nutrition and poverty approach, versus this administration, ABC.

MR. McCLELLAN: Remember in the President's remarks today, he talked about a family that has been afflicted with AIDS, and he talked about a mother and her two children -- who actually were here today -- they came and met with the President in the Oval Office prior to his remarks. The President had a good discussion with them. Their family doctor was with them. These are patients that are receiving funding under the President's Emergency Relief Plan. And they are getting the antiretroviral treatments that they need.

Q Scott, Senator Kerry, yesterday and again this morning, in the driveway suggested that part of what's providing, "food for the insurgency," is the presence of American troops there. Insofar as the President more often than not says that the insurgents are targeting civilians, I wonder if you could reconcile those two views as to whether or not the U.S. presence is, in fact, a provocation, or --

MR. McCLELLAN: They're very hard to reconcile, Senator Kerry's views on Iraq. Now in terms of the views -- in terms of how we're addressing the enemy in Iraq, the President talked about that yesterday, and what the Iraqi forces are doing, as well. I mean, the Iraqi people are more and more coming forward and providing critical intelligence to help us go after the terrorists and bring them to justice. And the Iraqi security forces are more and more engaged in the fight against the enemy.

In terms of our troop presence, our troop presence is going to be dictated by what the commanders on the ground say, not politicians here in Washington, D.C.

MR. McCLELLAN: Well, I think Secretary Rice just talked about this recently; she was asked about it in a briefing, as well, and talked about it. And what's important is that we continue to train and equip Iraqi security forces so that they can defend their own country, and they can defend their people from the threats that are faced there in Iraq. And that's what we're working to do. And I think our commanders have talked about the importance of moving ahead and making good progress when it comes to training and equipping Iraqi security forces. And that's why we've said we've got a conditions-based approach for withdrawal of American troops, because ultimately it's going to be the Iraqi security forces and the Iraqi people that are going to have full control over their country and their security.

Q Scott, some people say that three months after Katrina there are as many as 300 unidentified bodies still in trucks in St. Gabriel's Parish.

MR. McCLELLAN: I'm sorry, that they are doing what?

Q There are still 300 bodies, unidentified, still in trucks, in St. Gabriel's Parish. Some of my colleagues are calling this disgraceful. Is the President aware of this? And can anything be done to allow the grieving families to recover and bury --

MR. McCLELLAN: I haven't checked since we've been back in the last couple days on the latest facts regarding some of that information. We do have a federal coordinator that is working with state and local authorities to move forward on these issues. And in terms of the bodies, that is primarily a state responsibility -- is my understanding. And I think that's the way it has been. But I think that either Admiral Allen or someone on the ground in that area could probably address those questions better, or even people here. But you might want to direct some of those questions to the state officials, too, because I think they're the ones who have the lead on that issue. And I'll be glad to look into to see if there's more --

Q Would you please?

MR. McCLELLAN: Sure.

Q Defense Secretary Rumsfeld doesn't want to call the enemy in Iraq insurgents, claiming that title gives them a legitimacy that they don't deserve. As of Tuesday, he's groping for a term he likes. Any suggestions?

MR. McCLELLAN: I'm sorry what was the last part?

Q Any suggestions?

MR. McCLELLAN: As of -- as of Tuesday he what?

Q He was groping for a term.

MR. McCLELLAN: Oh, well, I think the President -- I think the President talked about the enemy yesterday and defined it in three different categories, and I'll leave it at that. We appreciate all that Secretary Rumsfeld is doing.

Go ahead, Victoria.

Q Can you tell us when was the last time that the commanders on the ground in Iraq requested more forces?

MR. McCLELLAN: They could probably tell you that. Off the top of my head, no, I couldn't do that. I think it was probably most recently related to the elections because we did increase the number of forces significantly to address security issues heading into these elections that are going to take place in two weeks.

Q And have they also said that -- yet that after the elections they want -- they do want to see a decrease, a definite --

MR. McCLELLAN: Oh, I think they've indicated that the expectation is that after the elections that they would be able to go back down to the number that they were at prior to the elections.

Go ahead.

Q Thank you, Scott. As you know, the House recently passed before the holidays a spending measure by just two votes that had $50 billion in cuts in it. But it was only enacted after drilling for ANWR was removed from the package.

Now, the Senate prior to that did pass a package that included ANWR drilling, so it's going to conference.

MR. McCLELLAN: Right.

Q Will the administration make the kind of effort that it did to secure passage of a final conference report that does include ANWR drilling? And would the effort from the administration be on the par that it was when it passed the prescription drug bill?

MR. McCLELLAN: We are going to continue advocating very strongly for opening up a small portion of ANWR to environmentally responsible exploration and production. We believe that's an important way to help address some of the concerns we have when it comes to high energy prices. We have talked at length in this room about high energy prices. They've since come down some. But we need to address the root causes of our dependence on foreign sources of energy.

And part of addressing that through our comprehensive approach is also expanding domestic exploration and production in environmentally responsible ways. And that's why we believe very strongly in this provision and urge Congress to get it passed. It's an additional step we can take on top of the comprehensive energy strategy that we passed this summer.

Q You've urged passage from this podium now and before. Will the President call members of the Senate and the House --

MR. McCLELLAN: I'll keep you updated on the President's calls. I mean, Congress is going to be coming back into -- well, the House is going to be coming back into town early next week, and then the Senate will follow. And we want to see them move forward on important priorities like the deficit reduction package, and find savings for the American people. We believe it's important to do so. We have outlined significant savings in our budget and we have worked to slow the growth in non-security discretionary spending, and we will continue to do so. We've been leading the way when it comes to that, and we want Congress to push the envelope when it comes to finding savings.

Q Scott, I have a two-part, and if you're merciful, in view of the fact that you were away for such a long time, a third part. (Laughter.) There is an Internet report that the salary of President Marsha Evans of the Red Cross is $651,000, while Brian Gallagher, of the United Way, is paid $375,000, but the Salvation Army's Commissioner Todd Bassett is paid only $13,000 a year, plus a house.

MR. McCLELLAN: I'm sorry, that whose?

Q This is Salvation Army Commissioner Todd Bassett, is paid only $13,000 a year, plus a house. And my question: Does the President believe the Red Cross and United Way, as tax-exempt charities, ought to be more like the Salvation Army regarding executive salaries?

MR. McCLELLAN: Well, the President has worked very closely with each of those organizations to provide much needed help to people who are in need, including in the Gulf Coast region. And we appreciate what those leaders have been doing to address the needs of the people who are suffering. And in terms of decisions like that, those are made by the boards of those respective organizations.

Q Second question: All Saints Episcopal Church in Pasadena, California, is the subject of an IRS investigation into allegations that it misused its tax-exempt status for a sermon against the war in Iraq and against President Bush's tax cuts. And my question: Will the President intercede on behalf of this church to stop this investigation that has all the earmarks of a political retribution, since the President has so much respect for churches?

MR. McCLELLAN: I'm not familiar with this specific enforcement action, but I think that that's something you need to address to the IRS, if it's an IRS enforcement action.

Q Yes, but I just wonder, is the President -- does he approve of this? Won't he intercede on behalf of this church?

MR. McCLELLAN: If I've got any more for you, I'll provide it. But I don't think that's the proper place for the President to engage in IRS enforcement matters.

Q Okay. And my last one -- in the President's giving to Muhammad Ali the nation's highest civilian award, he praised Ali as "the greatest of all time" and said he was so pretty, and a man of peace. The Washington Post noted that Ali lost his boxing license for three years when he refused to serve in the army due to his allegiance to the stridently anti-American, anti-white Nation of Islam. And my question: Does the President believe the Post is wrong to mention this history?

MR. McCLELLAN: The President was very pleased to honor Muhammad Ali and several other distinguished Americans, and even some people who have led in other parts of the world, with the Medal of Freedom, our nation's highest honor. And what he said when it comes to Muhammad Ali is what he stands by.

Q Scott, with the revised GDP numbers that you mentioned at the top here, can you talk a little bit about how that might affect the crafting of the '07 budget?

MR. McCLELLAN: No, because we're still in the process of going through the '07 budget. That will be talked about when we release that in February.

Q Okay, well, can you say that it might reduce --

MR. McCLELLAN: I mean, obviously, one thing that has happened over the past couple years is -- because we've had a strong and growing economy, increased revenues have been coming into the federal coffers. And that has helped us address some important needs and helped to put us on track to cut the deficit. It's important that we also continue to act when it comes to holding the line on spending. And that's what I was talking about in response to John's question a little while ago. That's why it's important to move forward on the deficit reduction package. We need to keep our economy growing and we need to exercise responsible spending restraint.

Q Does it suggest there would be -- the percentage of the GDP against the deficit would have to be a smaller bite?

MR. McCLELLAN: I'm not going to try to talk -- we'll have our budget forecast coming out in February and we'll talk more about it at that point.

MR. McCLELLAN: Yes, the point is to have four speeches before the December 15th elections. Yesterday was the first speech, and the President said he would be talking about different pillars of the strategy in the coming weeks. But he will continue to talk about it after the December 15th elections, as well, as he has been for some time. It's important to keep the American people informed about the progress we're making and the challenges we face, and important to talk to them about the clear plan for victory that we have.

Q Is the next one on unification?

MR. McCLELLAN: The next one is still a little ways off, and we're not ready to preview it at this point.

MR. McCLELLAN: What happened to it? I'm not sure at this point. We have never received it, though. We did hear it in the news reports, and that's why we reached out to the court.

Q They're typically mailed out, right? So it's --

MR. McCLELLAN: Yes.

Q Okay. And is this the first time --

MR. McCLELLAN: It's probably somewhere in the mail. (Laughter.)

Q In Crawford or here?

Q Is this the first time the President would have received a summons since becoming President?

MR. McCLELLAN: No, I don't -- oh, since becoming President.

Q Yes.

MR. McCLELLAN: It's the first I can recall off the top of my head. I'd have to double check that, though.

Q Is he going to get Gonzales to get him off again?

MR. McCLELLAN: Go ahead.

Q Back on the economy, the crisis in the U.S. auto industry, with the threatening shut down of a large chunk of GM, Delphi Corporation. This is really the United States machine tool industry. We have two of them. One is in auto, the other is in aeronautics. Now, if we lose that capability, we have a hard time calling ourselves an industrial power. And both UAW workers and management -- Bill Ford was here about a week ago saying that we represent a capability, we can produce cars, but we can produce a lot of other things, and that's what we want to do. But they're threatened with getting shut down. And given -- I mean, in light of all your nice figures that I guess is in this latest report, what does the President consider --

MR. McCLELLAN: Nice figures. You're disputing all the clear indicators that show our economy is expanding and growing in a strong way?

Q The problem with GDP is it doesn't distinguish between whether or not you have a profit at some casino, or whether you build a nuclear power plant. I'm talking --

MR. McCLELLAN: Well, look at some of the other indicators. You have more than 4 million jobs that have been created since 2000 -- since 2003.

Q What I'm talking about --

MR. McCLELLAN: You have an unemployment rate that is down to 5 percent.

Q What I'm talking about is something specific: U.S. manufacturing capabilities, our ability to produce --

MR. McCLELLAN: The manufacturing activity has been growing, if you look at some of the indicators over the last several months and beyond.

Now, you do bring up a very important topic. In terms of the auto industry, they have been going through a period of transition. And there are workers in this economy that have been affected by the many challenges we've faced over the last several years. But our economy has shown great resiliency in the face of some difficult challenges. We need to continue to act on pro-growth policies that we have put in place to keep our economy growing even stronger.

We also need to make sure that we are providing our work force with the training and education that they need to meet the jobs of the 21st century. And that's what we have been working to do. The President has talked about his initiative when it comes to supporting community colleges and retraining workers to fill high-paying jobs. And that's what -- we are going to continue to focus on that, as well. And we are concerned about those who have lost jobs over the last few years. And that's why it's important to continue to act.

Q Does the President consider a machine tool industry as a national security concern for the United States, having such a capability?

MR. McCLELLAN: I really haven't talked to him about it in those terms. But I think he's expressed his views when it comes to the economy and when it comes to different sectors in our economy. And we want to keep all sectors in our economy growing, including the manufacturing sector.

Q Scott, back on jury, just briefly. You said the President wanted to reschedule it? Reschedule it until when? Have you indicated a time?

MR. McCLELLAN: Well, we talked to the judge, and the judge said that that would be fine. And so we'll work with the court on a time to reschedule it.

Q Once he leaves office, then?

MR. McCLELLAN: No, we'll work with the judge on a time to reschedule it.

Go ahead.

Q Where did the letter go?

MR. McCLELLAN: I'm sorry?

Q Where did the letter -- the jury letter go, to Crawford or here?

MR. McCLELLAN: I'm not sure where it is at this point, because we've never received it. We've been checking the mail here, too.

Go ahead.

Q Scott, the 35-page strategy released yesterday, I believe on pages two and 12, there's a passage about the possibility of changes in force structure within the next year. Is that a timetable, a framework, a goal, a policy? And why in his speech did the President chose not to talk about that section yesterday in Annapolis?

MR. McCLELLAN: Not choose to talk about which section? He talked at length about the training and equipping of Iraqi security forces.

Q But in the document --

MR. McCLELLAN: And he talked about how our decisions would be based on conditions on the ground and based on the recommendations of the commanders. That's the way it should be.

Q But he choose not to talk about a time frame, whereas in the document on page 212 -- although it's all caveat-ed up heavily, it does say --

MR. McCLELLAN: So you wanted a three-hour speech?

Q -- "within next year". Oh, the more the better, especially --

MR. McCLELLAN: That's why we provided the document so people could look at that, and look at the way we're measuring progress and look at the challenges that remain, and understand what our strategy is and how we're working to achieve victory in Iraq.

Q What is the "within the next year"? Is that a goal, a framework, a prediction? How are we to take those words?

MR. McCLELLAN: What do you mean, "within the next year"? What was the exact --

Q It says in the document --

MR. McCLELLAN: I don't have the document in front of me, so you might -- you might want to refresh me?

Q It says in the document, "a change in force structure within the next year". Is that a goal of this administration, a policy --

MR. McCLELLAN: No, I think it's what we said in the document, that the expectation is that our posture is going to change on the ground in the coming year because of the progress that we're making, but we can't guarantee what's going to happen in terms of our troop levels because it's going to be based on the conditions on the ground and the circumstances on the ground. And the commanders are going to tell us what they need, and what we're able to reduce in terms of force posture.

Q Scott, what's happened to the administration's analysis of the insurgency or the enemy, whatever the preferred term, is between Vice President Cheney's statement last spring that it was in "the throes of defeat" and the three categories that were delineated in the --

MR. McCLELLAN: Yes, I think the Vice President commented on that very quote that you just brought up, and he talked about it in a little more detail than you did, so I would go and encourage you to look back and see what he said. In terms of what we have said, you can go and look at what the President said just yesterday.

Q So you --

MR. McCLELLAN: So I what?

Q Are they not in the throes of defeat?

MR. McCLELLAN: You need to look at what the Vice President said about those remarks. That's not the full characterization of his remarks.

Q -- extended his remarks on that, has he?

MR. McCLELLAN: He talked about it, and that's not the full characterization of his remarks.

MR. McCLELLAN: I think the State Department has already addressed that issue.

Q But do you have any reaction to that? On Thanksgiving, President Zapatero said, I don't care what the U.S. says.

MR. McCLELLAN: Our reaction is what the State Department has already said on it.

Q On the economy, why is the administration releasing the short-term projections on economic growth, but not releasing the five-year projections on the deficit?

MR. McCLELLAN: Well, this is part of our budget and this was ready to be released and that's why we're going ahead and providing that information to you all.

Q Well, also, I know the administration expects to reach --

MR. McCLELLAN: We update our projections on the deficit when we release the budget and when we do the mid-session review each year.

Q Well, I know the administration expects to reach its five-year goal on deficit reduction based on your fiscal '04 baseline, but do you expect to continue that downward spiral by 2012, which is when your projection is supposed to go out?

MR. McCLELLAN: I think we've expressed what our views are when it comes to being able to cut the deficit, and we want to stay on track to doing that. That's why it's so important we keep the economy growing, which will mean more revenues coming in, and why it's important that we move forward on spending restraint.

And one aspect of that is addressing the mandatory spending and addressing these entitlements. It's important that we continue to move forward on reforms in those different areas. That's the best signal we can send to the markets and others that we are serious about getting our budget in control for the long term. And I think you need to look at the long-term budget, because that's where the real problem is, versus the short term. And so I think we need to separate that out.